On 11 July 2006 at the House of Commons, the Secretary of State for Trade and Industry, Alistair Darling, introduced The energy challenge, the report arising from the Governments energy review and consultation. The consultation attracted some 5,300 responses including a detailed response from the RSC. So how did the final report measure up?

The report presents the UK's current energy situation and the Governments future energy scenario. A number of nuclear and coal fired power stations will close over the next 20 years and this will result in an electrical power shortfall of around 25GW by 2025. Factor in the decline in North Sea gas and oil production and it is clear why there is talk of an 'energy gap' which will make us increasingly reliant upon imported oil and in particular gas (up to 90% by 2020).

In its report, the Government spells out the cornerstones of its energy policy: the UK's energy supply must be secure (minimising reliance upon particular fuels and suppliers), affordable and clean. On the issue of clean energy, the Government reiterates its commitment to both the Kyoto Protocol and to the more challenging domestic carbon emission reduction target of 20% below 1990 levels by 2010 (and 60% by 2050). But the likelihood of the domestic targets being met in 2010 is at present highly doubtful.

Filling the energy gap

In the report, the Government proposes a UK energy strategy for the next fifty years. The strategy includes saving energy (including more efficient transport), developing renewable power and carbon capture and storage technologies to use with conventional fossil fuel power stations. Most controversially the report also supports the need to build new nuclear power stations.

Saving energy

The Government has placed saving energy at the top of its agenda and the RSC welcomes this. Technology will not provide a short-term solution to meet carbon emission reduction targets. Reducing energy demand is the only way to achieve these targets.

But it is unclear from the report what measures the Government intend to put in place to achieve energy usage reductions and the extent to which saving energy can fill the energy gap. 

The critical sectors that we need to concentrate on are domestic living and transportation. The Government announced a number of policies for saving energy in Defra's 2006 Climate Change Programme. The domestic sector offers a huge opportunity for reducing carbon emissions but whilst the Government has emphasised the importance of energy efficiency in new buildings, there is little commitment to increasing the energy efficiency of existing housing.

Several Government commitments do provide a move in the right direction and are welcomed by the RSC. There is a commitment to raise basic standards of energy efficiency and the phasing out of the least efficient electrical goods (including the energy wasteful standby mode).

For energy savings to be fully realised more Government action is needed. We hope that more information on this part of the strategy will be available in the forthcoming energy white paper (due to be published in 2007).

Transport

Transport accounts for 30% of total UK energy use and 25% of UK carbon emissions. Tackling this must be a focal point for reducing carbon emissions but the report fails to announce any significant measures that will reduce the impact of transportation. This is hugely disappointing. The proposed increase in car tax for polluting vehicles is unlikely to make a big impact.

The Government has also proposed to increase the Renewable Transport Fuels Obligation (RTFO) to 10% by 2015. The RTFO originally made in 2005 will come into force in 2008 and originally obliged transport fuel suppliers to ensure that by 2010, 5% of all road vehicle fuel supplied is from sustainable renewable sources. This was expected to cut annual carbon emissions in the transport sector by between 2% and 3%. 

A rise to 10% raises some concerns and may be too ambitious. Without new technologies it can only be met by importing huge volumes of biofuels, which would be counterproductive. The Government must now invest in the development of second generation biofuel technology, for example biofuels from lignocellulosic biomass such as a straw and wood. These new technologies have the potential to decouple the competition between biofuel and food production and make the RTFO sustainable.

Emissions trading

In The energy challenge the Government acknowledges that large industry must also improve its energy efficiency. It has chosen to affect this through the EU Emission Trading Scheme (EU ETS). The EU-wide scheme started in January 2005 and requires industry to purchase further emissions quotas above a basic allowance. 

"for energy savings to be fully realised more Government action is needed"

Under the scheme, each participating country proposed a national allocation plan with emission caps for industry. But it became apparent by May 2006 that many countries had given their industries such generous caps that there was no need for them to actually reduce emissions. 

The Government has committed itself to pressing the EU to include vehicles and aviation under the ETS but for the scheme to be successful in reducing industrial emissions it must now push for stricter caps in the scheme's second phase (2008-2012). It must also negotiate an extension beyond 2012 to deliver long-term fixed costs for carbon which will encourage investment in carbon abatement technologies. 

Renewable power

The energy review report acknowledges the importance of renewables and the need for support to ensure that investment in renewables continues. This will be done by increasing the level of the Renewables Obligation (RO) to 20% by 2020.

Introduced in 2002, the RO requires electricity suppliers to supply a portion of their electricity from renewables; a proportion that will increase each year. In the updated plans, the Government propose to adapt the RO to provide more support to emerging technologies - such as offshore wind, at the expense of more developed renewable technologies. A system providing differentiated levels of support will be developed by 2009.

The Government has also suggested a streamlining of the planning process for new renewables projects. Obviously there would be benefits here, but there is also some concern that local stakeholders do not lose the essential element of consultation in such developments.

Clean coal technology

In the energy review report the Government expresses its commitment to commercial demonstrations of carbon capture and storage (CCS) technology. The report states that CCS could reduce the carbon emissions of coal or gas power stations by up to 90%. CCS could make the use of fossil fuels viable as part of our future energy mix.

The commitment to CCS is welcome. There is a real chance for the UK to lead the world here as we have the infrastructure to support such a commercial demonstration plant. In leading the way to prove CCS technology is viable, we open the door for its adoption in rapidly developing economies such as in India and China, who are likely to double their carbon emissions from fossil fuels within 20 years.

There is no specific mention of the possibility of coal/gas to liquid technology combined with CCS in the report. This technology can produce chemicals, fuels and capture carbon dioxide. There is also no mention of applying CCS technologies to power plants that co-fire biomass so that the carbon dioxide captured during plant growth is essentially sealed away resulting in a net reduction of greenhouse gases in the atmosphere.

New nuclear build?

The most contentious part of the report is the enthusiasm the Government shows for nuclear power. Nuclear power is a mature, low carbon energy technology. New third generation reactor designs are significantly more energy efficient than previous designs and produce less radioactive waste over the course of their lifetime, but the issue of future waste and legacy waste must be dealt with.

At present we seem to be in a situation where the decision to go forward with nuclear power has been made without a firm timetable for managing existing UK nuclear waste. The Government set up the independent Committee on Radioactive Waste Management (CoRWM) to review the options and after a public consultation, CoRWM reported back, favouring the creation of a geological repository. 

But there is still a need for a long term waste management strategy. The RSC sees the involvement of chemical scientists as key. We have taken the initiative here and in November 2006 co-organised a multi-stakeholder meeting at Loughborough University to examine the scientific case for a waste repository in the UK.2

For any new build, it is critical that waste management is included in the initial financial models. The cost of dealing with new nuclear waste must come from revenue generated by the power station itself.

The next generation of reactors are likely to use fuel in a once through cycle with waste sent direct for deep geological disposal rather than expensive reprocessing. But it is possible that chemical and nuclear scientists will develop economically viable reprocessing technologies in the near future. 
Whilst nuclear power should compete with other energy technologies on a level playing field, without subsidy, the Government must be prepared to invest in the appropriate nuclear research and development. 

Good in parts

The energy review report is promising and disappointing in equal measures. The commitment to a long-term value for carbon and to the demonstration of CCS technologies is very encouraging, but the lack of significant measures to reduce energy use in existing housing and transportation is very disappointing.

The report mentions 17 new consultations that will need to be completed before several proposed measures can be taken forward, so progress is likely to be slow!

The RSC continues to make the case for the importance of the chemical sciences to our future energy needs. We were recently invited to Downing Street to meet with the then energy minister, Malcolm Wicks and present an outline of the role of the chemical sciences in delivering a secure, affordable and clean long-term energy supply. The minister gratefully accepted our offer to input expertise into a number of energy related activities that will arise as a consequence of the energy review.